Restructuring Programs

9 Months Ended

Sep. 30, 2011

Restructuring Programs

Restructuring Programs

14.  Restructuring Programs

Fourth Quarter 2010 Harsco Infrastructure Program

On December 8, 2010, the Company approved a restructuring plan for the Harsco Infrastructure Segment (the “Fourth Quarter 2010 Harsco Infrastructure Program”).  This restructuring initiative was in response to global economic and financial conditions that were adversely affecting this Segment’s end markets.  These conditions included such factors as the following:

· a continued shortage of meaningful commercial and multi-family construction activity in various regions of the world served by the Harsco Infrastructure Segment;

· pricing pressures as customers worldwide continued to seek lower cost solutions; and

· postponements, deferrals and cancellation of jobs and projects.

This restructuring initiative is part of an ongoing transformation strategy within the Harsco Infrastructure Segment to improve organizational efficiency and enhance profitability and stockholder value.  The strategy includes optimizing the segment as a more streamlined, efficient, cost-effective, disciplined and market-focused global platform.  Objectives of the program include balancing short-term profitability goals with long-term strategies to establish a platform upon which the business can grow with limited fixed investment and generate annual operating expense savings to strengthen 2011 and future performance.  Under this restructuring program, the Harsco Infrastructure Segment further reduced its branch structure; consolidated and/or closed administrative office locations; further reduced its global workforce; and rationalized its product lines.

At September 30, 2011, the Company had completed workforce reductions of 451 employees of a total expected workforce reduction of 494 employees.  The remaining workforce reductions are targeted for completion during 2011 and the remaining exit activities are targeted for completion during 2012.

The restructuring accrual for the Fourth Quarter 2010 Harsco Infrastructure Program at September 30, 2011 and the activity for the nine months then ended are as follows:

(In thousands)	Accrual December 31 2010		Adjustments to Previously Recorded Restructuring Charges (a)			Cash Expenditures			Foreign Currency Translation		Accrual September 30 2011
Harsco Infrastructure Segment
Employee termination benefit costs	$	9,254	$	(1,039	)	$	(7,208	)	$	307	$	1,314
Cost to exit activities	21,449		1,722			(10,082		)	92		13,181
Other	97		—			(90		)	—		7
Total	$	30,800	$	683		$	(17,380	)	$	399	$	14,502

(a)Adjustments to previously recorded restructuring charges resulted from changes in facts and circumstances in the implementation of these activities as well as the timing of additional expenses recognized under U.S. GAAP.

The majority of the remaining cash expenditures of $14.5 million related to these actions are expected to be paid throughout 2011 and 2012.

Prior Restructuring Programs

The Company implemented other actions throughout 2010 to further reduce its cost structure and close certain facilities as a result of the continued financial and economic downturn.  These actions were in addition to the Fourth Quarter 2010 Harsco Infrastructure Program, which is described above.  Through September 30, 2011, the Company had completed all workforce reductions related to these actions of 249 employees for the Harsco Infrastructure Segment; and reductions of 188 employees of a total expected workforce reduction of 242 employees for the Harsco Metals & Minerals Segment.  Remaining workforce reductions and costs to exit activities are targeted for substantial completion during the remainder of 2011 and in 2012.

The restructuring accrual for the prior restructuring programs at September 30, 2011 and the activity for the nine months then ended are as follows:

(In thousands)	Accrual December 31 2010		Adjustments to Previously Recorded Restructuring Charges (a)			Cash Expenditures			Foreign Currency Translation			Accrual September 30 2011
Harsco Infrastructure Segment
Employee termination benefit costs	$	905	$	(361	)	$	(571	)	$	27		$	—
Cost to exit activities	413		(61		)	(367		)	15			—
Total Harsco Infrastructure Segment	1,318		(422		)	(938		)	42			—
Harsco Metals & Minerals Segment
Employee termination benefit costs	2,109		(88		)	(623		)	(134		)	1,264
Cost to exit activities	864		—			(131		)	28			761
Total Harsco Metals & Minerals Segment	2,973		(88		)	(754		)	(106		)	2,025
Total	$	4,291	$	(510	)	$	(1,692	)	$	(64	)	$	2,025

(a)Adjustments to previously recorded restructuring charges resulted from changes in facts and circumstances in the implementation of these activities as well as the timing of additional expenses recognized under U.S. GAAP.

The majority of the remaining cash expenditures of $2.0 million related to these actions are expected to be paid throughout 2011 and 2012.